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Assessment order violated natural justice; Court grants interim relief. The court found that the assessment order was passed without considering the petitioner's response to the show cause notice, which violated natural ...
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Assessment order violated natural justice; Court grants interim relief.
The court found that the assessment order was passed without considering the petitioner's response to the show cause notice, which violated natural justice principles. Despite the respondent's argument that issuing a show cause notice was unnecessary, the court disagreed, noting discrepancies in the process. As a result, the court admitted the petition, acknowledging the potential violation of natural justice, and granted interim relief until the final disposal of the case.
Issues: 1. Compliance with the principles of natural justice in the issuance of show cause notice and passing of the assessment order.
Analysis: The petitioner, through their counsel, highlighted the show cause notice at Ext.P4, issued in accordance with Section 144C of the Income Tax Act, 1961, accompanied by a draft assessment order. The petitioner requested additional time to respond, citing the limited four-day period granted. Despite submitting a reply to the show cause notice at Ext.P6 on 23.03.2021, the assessment was finalized based on Ext.P7, which claimed the petitioner had not responded by the required date. The petitioner argued that the assessment order was passed without considering their response, alleging a violation of natural justice principles.
The Standing Counsel for the respondent contended that issuing a show cause notice was unnecessary as per Section 144C of the Income Tax Act, asserting that adequate hearing opportunities were provided to the petitioner. However, the court observed discrepancies in the process. The impugned order at Ext.P7 indicated that while initial notices were issued under Section 142(1) on 04.02.2021, the first notice under Section 144C was sent on 18.03.2021, granting only four days to respond. The petitioner's reply at Ext.P6, dated 23.03.2021, was disregarded in the assessment order, which incorrectly stated non-receipt of a response to Ext.P4. The court found the respondent's argument regarding the show cause notice's necessity unconvincing, deeming the order flawed and non-compliant with natural justice principles.
Given the above analysis, the court refused the respondent's argument against the show cause notice's requirement and acknowledged the potential violation of natural justice principles in the assessment process. Consequently, the court admitted the petition and granted interim relief until its final disposal.
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